Muara Enim Coal-to-Liquids Project

Muara Enim Coal-to-Liquids Project in Sumatra, Indonesia is a project being investigated by Sasol Synfuels International (SSI) and the Indonesian coal and energy company, the Bumi Resources.

Background
In March 2006 the President-Director of PT Bumi Resources, Ari Hudaya, told Bloomberg that the following month the company would hold talks with Sasol about the possibility of a coal-to-liquids diesel project in Sumatra. Bloomberg reported that Bumi's Finance Director Eddie Soebari explained that to secure a coal supply for the project the company had agreed to buy Pendopo Energi Batubara which had coal leases in the Muara Enim basin. Bloomberg reported that Pendopo has resources of more than 1.5 billion tons of coal.

In early 2009, Bumi Resources acquired 84% ownership of PT Pendopo Energi Batubara (PEB) via via Pendopo Coal Ltd. The company states that PEB "owns 17,840 hectares of concession area with a 30-year operating permit, effective from May 5, 2009 until May 4, 2039. Research conducted by a mining consultant has revealed that PEB has potential reserves of 1,954 million tonnes." Coal mining operations are currently at the early development stage. In its 2009 annual report the Bumi Resources states that "looking at the coal characteristics it produces, PEB will be the coal producer specifically supplying power plants and alternative industrial energy." One PEB project under investigation is the Muara Enim Coal-to-Liquids Project.

In December 2009 SSI signed a memorandum of understanding (MOU) with Indonesia to investigate an an 80,000 barrel-a-day coal-to-fuel plant. In a media release Sasol states that the MOU, which was signed in London by Gita Wirjawan, the chairman of the Investment Coordination Board of the Republic of Indonesia, relates to a "screening study into the viability of an integrated Coal-to-Liquids (CTL)". However, Sasol does not mention the possible location for the project. However, it states that "Indonesia's wealth of stranded coal resources, coupled with the country's strategic drive for enhanced energy security are two vital components that favourably contribute to Indonesia being an ideal location for a CTL facility. "

A later news story reported that Sasol was in discussions with PT Bumi Resources and state-owned oil firm PT Pertamina. "Indonesian officials said the liquefaction plants would operate on low-priced lignite, ensuring profitability for as long as crude oil prices exceed $35 per barrel," the Mail & Guardian online reported. A Bloomberg story on the other hand reported that Bukin Daulay, the head of coal and mineral research at the Ministry of Energy, "may buy coal from PT Darma Henwa, an Indonesian coal mining contractor" with the output for sale to Pertamina.

In May 2010 Wirjawan stated that Sasol was expected to complete its feasibility study "in September 2010" and that the company "will decide whether or not to invest here two months later."

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